Fundraising Strategies for Growing Your Company in India


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Money is essential to launch a new venture. When a company is founded to serve a specific niche market, it can eventually expand to a much larger market. These companies, which started with moderate to little means, needed investment to survive and thrive in a highly competitive industry. 

Capital for a developing business, like if you start a casino business, for example, can be difficult to secure, but the resulting challenges may be thrilling in and of itself. It’s similar to how every small business like betshah started. There is no way around them, but being aware of them can help entrepreneurs mitigate their negative effects.

Raising Capital for Your Business

Though it may be challenging initially, a business with tremendous promise may be presented with an aggressive funding pitch. Here are some options for securing financial backing for your fledgling company.

Also Read: 11 Crowdfunding Platforms in India (Best Websites)

Fantastic Ways to Fund a Small Business

Getting your firm off the ground requires funding, but you may wonder what those options are and how they operate. We’ll delve into it all so you can pick the right approach for your company after gaining a deeper understanding of the various available options.

Equipment and Invoice Loans

The initial investment in factory buildings and production equipment is exceptionally high, making manufacturing an extremely capital-intensive industry. Financing the assets on credit may be the most viable option. 

The loan terms typically range from 5–7 years, with a relatively low-interest rate. Companies often take out acquisition loans secured by a charge on the acquired asset. As compensation, the creditor may, in some instances, be offered a stake in the business.

Seed Capital

Seed money is the initial funding a firm receives from its founders or “promoters” before it begins operations. By investing his own money or making arrangements from his private estate, the promoter demonstrates his faith in the business idea. It avoids having to go out and raise money from investors.

Pure Self-Funding

One of the earliest methods of financing development and expansion is to use leftover excess funds after all other expenses have been paid. However, it is highly impractical for small enterprises, as they typically have slight excess due to intense competition from larger firms. However, firms with enormous development potential and the ability to use current earnings to support future goals may find self-funding a viable option.

Crowdfunding

Crowdfunding in India is a viable option for businesses seeking to expand their current operations through capital acquisition. Having a close friend or family member as an investor is one of the most convenient ways to raise money.  

Friends and family are the most accessible audience for your grand schemes. For these reasons, Crowdfunding is gaining in popularity.

Angel Investor

You can think of an angel investor as a wealthy person with money to spare and who wants to invest in your business. Like any other investor, they care primarily about your business concept, ability to expand into a huge market, growth and profit projections, and ability to turn a profit. 

In exchange for a portion of your company, they invest money in its expansion. Angel investors are well-known for making early investments in startups and potentially waiting to cash out until the companies are listed publicly.

Venture Capitalist

When people talk about venture capital, they are not referring to a distinct organization but rather to a company. A limited liability partnership (LLP) typically consists of wealthy individuals who invest in companies in exchange for equity. The partners’ cash and other liquid assets are plentiful. 

If venture investors want to protect their investment and exert influence over the company, they will likely appoint their people to the board of directors. They back potentially hazardous businesses and help them succeed. They are commonly referred to as VCs in the financial industry.

Bank Loans Credit

When it comes to funding a business, debt is an option that can be considered alongside equity. When a company is successful and poised for expansion, creditors are willing to lend them money. 

A significant perk of taking on debt is the ability to distribute risk throughout the firm. Borrowing money to finance your firm is preferable to selling equity if you wish to maintain full control over its operations. For this reason, debt funds are an unviable source of startup financing because, unlike equity financing, interest must be paid.

Working Capital Loans

In contrast to long-term loans used for expansion, working capital loans are used to finance day-to-day operations as the firm plans for future growth. After thoroughly reviewing the borrower’s creditworthiness, banks will provide working capital loans and may also accept inventory as collateral security on floating change. Due to the short loan term, the interest rate on working capital loans is typically high.

Startup Business Incubator

The term “business incubator” refers to a corporation that aids startups in establishing their foundational operations, such as securing office space, money, and personnel. Professionalism, experience, and savvy management are all hallmarks of a successful business incubator. There are several business incubators available to help new companies secure seed capital.

Government Projects

When it comes to small enterprises, governments aren’t quiet. Micro, Small, and Medium-Sized Businesses (MSMBs) are often the target of programs that provide access to low-interest loans for entrepreneurs (MSMEs). Pradhan Mantri Mudra Yojana is one of India’s most prominently marketed government programs.

Contest Funding

Winning a competition is one of the most cutting-edge approaches to securing startup capital. Startups having trouble raising initial capital can use competitions like this to boost their morale. The purpose of these competitions is to award the necessary funding to the most promising firm by having its representatives battle it out on live television. 

Products and company plans that stand out from the pack are the ones that receive the funding. Those who want to win the greatest deal contest should study the topic thoroughly in advance. For one example, consider business plan competitions that require a pitch.

NBFCs

Non-banking financial institutions (NBFIs) also offer convenient and beneficial business loans at a nominal interest rate. They are helpful for startups that need help securing capital elsewhere. The loans can be disbursed to the borrower with no paperwork or minimal paperwork.

Also Read: 5 Startup Funding Stages

Conclusion

Various factors drive progression, but one of the most important is the opportunity for growth. Businesses are similar to individuals needing capital to develop and broaden their operations. This is especially crucial for new businesses, as they typically have only an idea or model and no money to get started.